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The option to have access to services with the security of advance payment. For communication services may be less expensive than 'pay as you go' and for hotels and the like may reduce the requirement to carry local currency. At airports for example may reduce arguments over taxi fares.
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Host telling me to cancel my booking in exchange for a discount?
Part of the host's contract with booking.com is that booking.com will take a commission fee of 10-25% out of each booking made through them.
So if you cancel your booking.com reservation and pay the …